Revenue management, answered

Is the market and comp-set radius being used the right reference market for my area when property quality varies a lot across it?

Probably not. When quality varies sharply across a radius, you are averaging strong and weak performers together, which distorts your benchmark. You need to segment your comp set by quality tier first, then validate whether geography still makes sense within each tier.

By Jack Murphy, Head of Revenue Management at UpRev. Running pricing for US vacation rental managers since 2017.

Why Mixed-Quality Comp Sets Mislead You

A wide radius that mixes budget cabins with luxury lakefront homes produces a blended ADR and occupancy picture that accurately reflects neither segment. Your pricing decisions end up chasing a phantom middle that does not exist in your actual competitive landscape. The result is that premium properties get underpriced and entry-level properties get overpriced, both of which cost your clients revenue.

How to Build a More Reliable Reference Market

Start by sorting your market into two or three quality tiers based on bedroom count, amenity profile, and historical performance, then pull comps only from within the matching tier. Tighten or expand the geographic radius separately for each tier, since luxury inventory may be sparse and require a wider pull while budget inventory may be dense enough to stay hyper-local. Review the comp set quarterly, because new listings and renovations shift quality distribution faster than most managers expect.

When Geography Should Override Quality Segmentation

There are markets where location is so dominant, a beachfront row versus a block inland for example, that proximity matters more than quality tier when building your comp set. In those cases, hold geography tighter and accept some quality variance within it rather than pulling comps from a distant but comparable property. The test is simple: would a guest realistically choose between those two properties on the same search, and if not, they do not belong in the same comp set.